Inheritance Tax: Save £100,000s with simple advanced planning Article Discussion

Savvy_Sue

If your Dad's name is still on the deeds, then it could be difficult for anyone to sell the house without resolving what happened then. It could be worth checking if there is a restriction preventing Great Aunt from selling without Dad's involvement (and vice versa).

CatMcc

Thanks everyone, I'll see if I can speak to the solicitors that were involved at the time.

CatMcc

Ok quick update,
Instead of speaking to the solicitors involved I spoke to my mum. She has told me that when my dad died, nothing was done with his estate as such.

My great aunt arranged a funeral, mum went with death certificate and bill from funeral home to the bank and used the contents of my dads bank account to pay for it (there was a shortfall she made up)

My mum approached his merchant navy pension providers to set up the accounts for us three (we got his pension until we were 18/left full time education)

My great aunt plagued her about the house/our inheritance and had her solicitors send my mum the letter about not realising our claim to the house.

Apparently there is a bank account in Ireland of my dads, contentst unknown. My mum was not in a position to pay a solicitor to sort it officially probate etc as she was broke (raising us 3 kids on benefits and no support from dad) and my great aunt as far as we know didn't do anything else.

I've searched on Gov website for probate and there is nothing in the year of his death (2002) to present so assume no other party ever followed it up.

I know this isn't just about inheritance tax anymore and I am getting the feeling we should get advice from a solicitor, but I have a few quick questions now i have the above additional info....

1. As the house is still in my dads name and my aunts name would any change on the land registry i.e. the removal of dads name and addition of me and my sisters names kickstart inheritance tax issues etc.
2. As the house is in London and therefore even half a share is over the IHT allowance for 2002; would there be legal rammifications? No IHT was ever paid, and therefore i assume interest is accruing all the time. Do you get fined for non-payment (even if it was unknown)
3. If the above is a yes would it be better to let sleeping dogs lie until my great aunt dies? She doesn't want to leave her home, and we don't want to cause that to happen by having a tax bill we can't pay unless we sell the house, or cause her any stress and worry about the house.
4.Is it worth going to CAB about this, or should we head directly to a solicitor?

Thanks for all of your help so far!
Cat

SeniorSam

In view of what you have said, I do feel that you should speak with a solicitor about this. However, you were not to know that matters were not being dealt with correctly until now, and your mother was also not aware that certain procedures should have taken place. It may therefore be wise to speak with the Probate Court and explain the problem to them asking for guidance. Once you have done this you will know more and then possibly the solicitor could help.

Sam

getmore4less

CatMcc wrote: »

1. As the house is still in my dads name and my aunts name would any change on the land registry i.e. the removal of dads name and addition of me and my sisters names kickstart inheritance tax issues etc.

I recall the land reg rep that posts did comment on the position like this.

I can't remember if a grant was needed, if it is the IHT return is needed for the grant.


Make sure you have all the ducument from that solicitor.

secreteye

I have a question about calculation of inheritance tax.
My mother recently passed away and her estate is valued over £325K.
My father would died 15 years ago left the house to my mother and her 3 sons .
How do we calculate the amount of IHT to pay ?

getmore4less

secreteye wrote: »

I have a question about calculation of inheritance tax.
My mother recently passed away and her estate is valued over £325K.
My father would died 15 years ago left the house to my mother and her 3 sons .
How do we calculate the amount of IHT to pay ?

You start with HMRC form IHT205 you may have to transfer to using IHT400.

One key part will be establishing the transferable nil rate band which will need details of your fathers estate.

secreteye

HI , Thanks for the answer. I have another question . Will we be liable for capitial gains tax ?

Savvy_Sue

secreteye wrote: »

HI , Thanks for the answer. I have another question . Will we be liable for capitial gains tax ?

Not until / unless you sell the house, and even then it depends on its value at the date of death compared to its value on the date of sale and who's been living in it.

So you need to get a valuation: if you intend to sell it immediately / quickly then an estate agent could give this, and there's not likely to be much increase in price.

The situation in which you might need to pay CGT is if you decide to hang onto the house, rent it out for a few years, and sell it for much more than its value when she died. Even then, each of you has a CGT allowance to offset against the gain.

[Deleted User]

Hi, Apologies if this has already been covered but I couldn't find it.


My query is "does the new home allowance get amalgamated with the current Nil Rate Band into a new total allowance or will it be kept separate to be used only against the family home"


For example using 20/21 figures :
Husband dies leaving all to wife. Wife then dies with a total estate of £900000 including home worth £200000.


Is there an IHT liability on £700000 minus £625000 or is the whole estate exempt being below £1m in total.


Thanks